How California Voted On Propositions That Affect CRE
There could be a boom in affordable housing development in California in the coming years or decades with the outcome of the 2018 election.
The California election results are yet to be official but several statewide propositions, including funding for affordable housing for low-income, mentally ill residents and veterans, along with local measures on the ballot have a far enough lead to call it.
Over the coming days or weeks, more mail-in ballots will be counted before the election is finalized.
Here are the results — as of Wednesday — of the state propositions and local measures that could impact the commercial real estate landscape in the state. You can read our previous coverage of how these could affect the industry here.
Proposition 1: Authorizes Bonds To Fund Specified Housing Assistance Programs
Vote results: Approved 54% to 46%
The measure allows the state to issue $4B in bonds to fund several affordable housing and veterans programs. According to the measure, the money will be divvied up — $1.8B for affordable multifamily housing programs, $450M for infrastructure programs, $450M toward homeownership programs, $300M for farmworker housing programs and $1B in veteran home loans.
Proposition 2: Authorizes Bonds To Fund Existing Housing Program For Individuals With Mental Illness
Vote results: Approved 61% to 39%
The measure allows the state to sell $2B in bonds to fund the construction of housing and for support services for mentally ill homeless people and/or those in need of mental health services on the brink of homelessness. The funds will be paid back through a tax on individuals who earn more than $1M.
Proposition 4: Authorizes Bonds Funding Construction At Hospitals Providing Children's Healthcare
Vote results: Approved 61% to 39%
The measure authorizes the state to sell $1.5B in bonds to fund grants for construction, expansion, renovation and other capital improvements of children's hospitals and hospitals that provide services for children.
Proposition 5: Changes Requirements For Certain Property Owners To Transfer Their Property Tax Base To Replacement Property
Vote results: Rejected 58% to 42%
A yes vote would have allowed seniors who are age 55 and over, severely disabled individuals and those whose property have been impacted by a natural disaster to carry over their home property tax assessment to a new home regardless of price.
Proposition 6: Eliminates Certain Road Repair And Transportation Funding. Requires Certain Fuel Taxes And Vehicle Fees Be Approved By The Electorate
Vote results: Rejected 55% to 45%
More commonly known as the gas tax, a yes vote would have repealed the 2017 Road Repair and Accountability Act transportation law and made it harder for the state legislature to enact measures that increase taxes on gas and/or diesel fuel. Any new tax on gas or diesel would need voter approval.
Proposition 8: Regulates Amounts Outpatient Kidney Dialysis Clinics Charge For Dialysis Treatment
Vote results: Rejected 62% to 38%
Roughly 80,000 patients are treated each month at about 588 dialysis centers in the state. The measure would have limited dialysis clinics' revenue cap to 115% of specified direct patient care service costs and healthcare improvement costs, including staff wages and benefits, training and development, drugs and medical supplies, facilities and electronic health information systems.
Proposition 10: Expands Local Governments' Authority To Enact Rent Control On Residential Property
Vote results: Rejected 62% to 38%
The measure would repeal the 1995 Costa-Hawkins Rental Housing Act and expand local cities and authorities' ability to enact rent control. Currently, Costa-Hawkins prohibits cities and local government agencies from enacting rent control on apartment units built after 1995 and on single-family homes, condominiums and duplexes. It also allows for vacancy decontrol, meaning landlords can raise rents to market rate if a tenant vacates a rent-controlled unit.
Los Angles and Orange counties
Anaheim
Measure L: Anaheim Initiative To Raise The Minimum Wage
Vote results: Too close to call. As of Wednesday, votes were 50.5% in favor and 49.5% opposed
Brought on the ballot by local unions representing hotel workers and Disneyland theme park workers, Measure L would require hospitality and other businesses in the city that receive city subsidies to raise pay for minimum wage employees to $18 an hour by 2022.
Los Angeles County
Measure W: Los Angeles County Flood Control District Parcel Tax
Vote results: The measure needs 66.7% of votes to pass. As of Wednesday, the vote tally is 67.5% in favor and 32.5% opposed.
Measure W would authorize the Los Angeles County Flood Control District to levy an annual special tax of 2.5 cents/SF of impermeable surface on owners who have areas of their property where water does not seep through the ground, such as driveways, concrete, pools and other hardscaped land.
Santa Monica
Measure SM: Santa Monica Height Limit And Floor Area Ratio Charter Amendment
Vote results: Approved 71% to 29%
The measure requires the vote of at least five members of the city council to increase a maximum height limit or floor area ratio of a building or property unless it is an affordable housing project or a property owned by the Santa Monica-Malibu Unified School District.
Bay Area
Proposition A: Embarcadero Seawall Earthquake Safety Bond
Vote results: Approved 82% to 18%
This will allow the city to issue $425M in bond debt for the construction, reconstruction, improvement, seismic strengthening and repair needed on the Embarcadero seawall.
Proposition C: Additional Business Taxes to Fund Homeless Services
Vote results: Approved 60% to 40%
The bond measure will impose additional business taxes, a "Homelessness Gross Receipts Tax" that averages less than 0.5% (ranging from 0.175% to 0.69%) for San Francisco businesses with more than $50M in gross receipts. The funds would be used to house the homeless and expand shelter beds, fund legal assistance and rent subsidies, and fund mental health and substance abuse services.
Measure JJ: Brisbane Baylands Commercial and Residential Property Development
Vote results: Approved 55% to 45%
Measure JJ allows the amendment of the city's general plan to allow 1,800 to 2,200 units of housing and up to 7M SF of commercial development in the Baylands area.
Measure O: Affordable Housing Bond
Vote results: Approved 76% to 24%
The measure would create and preserve affordable housing for low-income households, working families and individuals who qualify, such as teachers, seniors, veterans, the homeless and those with disabilities, through a $135M bond offering.
Measure Q: Rent Amendments
Vote results: Approved 69% to 31%
Since Prop. 10 failed, two aspects of Measure Q that hinged on it passing are no longer applicable, but the measure's approval means that accessory dwelling units will be exempt from rent control on properties that are owner-occupied.
